Energy fiasco: Millions of smart maters don't work and are costing people MORE

Millions of homes and businesses which have already installed the digital devices have had problems switching to cheap deals and are even being hit with extra fees.

Many meters could have to be stripped out altogether and reinstalled with a Government-approved model as as the technology is not working properly.

A Daily Mail investigation has revealed how some small businesses are being charged 20p a day simply to have a smart meter while many homeowners are being asked to give readings to energy firms because the technology is not transmitting their data properly.

Going green: Ofgem has said the new meters may be 'useless'

The latest green energy fiasco is the result of suppliers pressing ahead with installing their own smart meters before the Government has decided on a standard model.

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Every home and small business is due by 2019 to get a smart device, which is designed to show people how much energy they are using by the minute, so encouraging them to cut back to save money and energy.

The industry will need to replace around 30million old electricity meters and 23million gas meters by the 2019 deadline.

Energy regulator Ofgem estimates four million smart meters are likely to be installed before 2014, while British Gas confirmed it has put in 400,000 so far.

However, because details of how the smart meters will work are not expected to be announced by the Government until March, many of the current devices may not be compatible and could have to be replaced in the future.

Savings: Colin Pemberton, 79, a retired mining engineer of Staveley, Derbyshire, saw big changes to his electric bill after he had a smart meter installed by his provider E.ON last year

The scheme is due to cost energy companies £11.7billion, which they plan to pass on to consumers by hiking prices. Smart meters are expected to add £6 to the average annual bill by 2015.

In a letter to suppliers, energy watchdog Ofgem said it was also concerned that suppliers may not be able to read meters installed by a rival company.

This renders the new technology useless if customers want to switch deals – in effect, the smart meter would work like the old types of ‘dumb’ meters currently in homes.

A spokesman said: ‘The meters being installed at present are not built to a common technical specification. As such, when a customer changes supplier, the new supplier may not be able to utilise the advanced functionality.

‘Furthermore, if the meter is not a compliant smart meter then it will have to be replaced by the end of the rollout.’

Consumer groups have also warned the green scheme is fast becoming a costly disaster.

Zoe McLeod, of Consumer Focus, said: ‘We have repeatedly raised concerns about the cost and installation of smart meters. Customers – who will ultimately foot the bill – need to be confident that they will see tangible benefits.’